I'll try and help but I don't have a Dbox handy, but the DreamBox 7020S is similar with regard to VLC.
VLC is a client/server application. So you need both elements installed for it to operate correctly. When you install a ready-made image, it usually includes the server part of the program, this is (again usually) included with the Enigma interface on the Gemini images.
You will also need to install the VLC application on the PC. You can obtain the latest version of the VideoLan Client here :
http://www.videolan.org/
The first time you invoke VLC from the Enigma Web-If it will send a file (called video.m3u) to the PC, which will fire up the PC end of the transaction and start the player that you have previously defined to handle m3U files.
M3U files are plain text play-lists, this is what is in the VLC file "video.m3u"
on my machine :
http://192.168.2.99:31339/0,02bc,02d0,02da,02db,02d0
I use the VLC media player as my default.
Most people will have the default set to Windows Media Player, which can cause problems. (I have completely removed WMP from my system as it constantly interferes with my music / multi-media files)
If you first concentrate on getting VLC to operate properly on the XP desktop with local files, then, when you invoke it via the Enigma interface, it should start up without a problem.
I've found that it works very well over the ethernet at 100mbps but you get varying quality on wireless.